I have long argued that we need the financial service industry to act as just that - to serve the needs of the community in which they operate. This means that they should adequately fund the operations of the productive sector of the economy. However, the majority of their profits come from casino operations where customers deposits and savings primarily fund their gambling operations. This activity has the effect of hoarding funds, which Keynes decried as the main reason for the failure of Say's law. As you know (if you have read Sabotaging America) Say's Law states that supply always equals demand and recessions are self correcting.
The German ban on "naked short selling" is really a ban on a form of derivative trading. It involves a bet that a particular financial instrument (e.g. a stock) will decline in value without actually taking any financial position in that instrument. When such huge bets become known herd psychology ensures that the "Market" starts to sell the particular instrument and the bet becomes a self-fulfilling prophesy. Perhaps it would be too much to suggest that the betting bank might also persuade some of its own customers to sell the particular instrument and help matters along - the mechanisms of "trash and cash" have many variants.
I have proposed the totally separation of commercial banking from casino banks to reduce the funds available for destructive betting operations and the winding down, at no taxpayer expense, of the latter when they fail.
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